LONDON — A profit warning pushed Mulberry Group’s shares down 23.8 percent on the London Stock Exchange Wednesday, although the brand’s chief executive officer Bruno Guillon remains upbeat about the British brand’s prospects.
Mulberry shares closed down at 7.05 pounds, or $11.55, after the company said pretax profits in the year ending March 31 would be “substantially below” market expectations, due to lower-than-expected sales growth, a tricky Christmas season and costs related to international store openings.
Last month, analysts at Barclays had projected pretax profits of 27 million pounds, or $44.8 million, and after-tax profits of 18.9 million, or $31.3 million, for the 2013-14 fiscal year.
All figures have been calculated at current exchange rates.
Mulberry, which added that sales will likely be flat against last year’s 165 million pounds, or $273.6 million, pinned the blame on lower-than-expected U.K. retail sales — a result of tough pre-Christmas trading conditions — and wholesale order cancellations from South Korea.
“We did not discount until after Christmas — but everybody else did. It was a competitive pre-Christmas environment, and a real challenge. Everybody was affected,” said Guillon in a telephone interview.
As for South Korea, Mulberry said that in recent days it had become clear that wholesale order cancellations from South Korean customers were likely to be “significant,” so the company now expects wholesale sales for the year to be down about 10 percent compared with last year.
Korea generates 20 percent of Mulberry’s wholesale business, and Guillon said Mulberry’s strategies in that market need to change.
“We grew very fast in Korea — we have 24 points of sale in department stores there — and the local market has become quite difficult now. Brands are overdistributed there.
“Our business was mainly based on one bag — the Alexa — and we need to extend the brand, to push other bags and messages, such as our Made in Britain DNA,” he said.
Overall, he said, Mulberry needed to bring “excitement and attention to the brand.” He pointed to the company’s new factory in Somerset, England, which, together with the first plant, now makes 50 percent of the brand’s bags.
“When I arrived here, that figure was less than 20 percent. There are major changes going on in the company, and we are looking at the very long term, and at making Mulberry successful inside and outside the U.K.,” he said.
In the statement, Guillon said Mulberry continues to be cash generative and to invest in the ongoing process of international expansion.
Later this year, Mulberry will open a 2,500-square-foot store in Las Vegas and a Paris flagship on the Rue Saint-Honoré.
The company said that in the 17 weeks to Jan. 25, total retail sales were down 3 percent, while international retail sales were up 40 percent.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)